Understanding Direction to Pay: Its Limitations and Recourse Available to You

As a restoration contractor, using Direction to Pay can help you make sure that you receive payment for your work from a homeowner’s insurance carrier. But these arrangements have their limits and challenges. Here’s what Josh Ehmke, General Counsel at One Claim Solutions, had to say about Direction to Pay and when you can use it to your advantage. 

Couple shakes hands with restoration contractor after discussing Direction to PayWhat is Direction to Pay?

Direction to Pay is a request that policyholders can make to their insurers asking them to send payment for services rendered directly to their contractor instead of them. When insurance companies send payments straight to restoration contractors, it simplifies and speeds up the payment process since contractors don’t have to wait for the policyholder to send the insurance payment to them.

Direction to Pay Requests are Not Legally Binding

As great as Direction to Pay seems, it usually isn’t the best solution to the problems that restoration contractors face when dealing with insurers because Direction to Pay requests are not legally binding. Josh describes Direction to Pay as a “polite, simple request that a policyholder can make to the insurance company saying, ‘Hey, go ahead and pay my contractor.’”

In most scenarios, Direction to Pay requests “look good, but, in reality, they are worthless,” Josh says. “They’re not enforceable at all.” Insurance companies can (and often do) say no and choose to pay the policyholder instead.

So how do you, as a restoration contractor, know when asking your customers to make a Direction to Pay Request to their insurers is actually worth it? What can be used as an alternative for this request? Keep reading to see the advice that Josh has for contractors.

Using Assignment of Benefits Instead of Direction to Pay

If you’re a restoration contractor in a state other than Florida or Texas, One Claim Solutions recommends always using Assignment of Benefits instead of Direction to Pay. Assignment of Benefits allows payments to be given directly to restoration contractors. Unlike Direction to Pay, Assignment of Benefits is legally binding. Instead of insurers getting to pick and choose when they want to comply, they are required to abide by the Assignment of Benefits. When contractors can count on carriers sending payment directly to them, it makes the payment process faster and less painful.

The Benefits of Direction to Pay in Florida & Texas

For restoration contractors in Florida and Texas, One Claim Solutions recommends using Direction to Pay because state laws restrict the use of Assignment of Benefits in these states. “Direction to Pay is better than nothing,” Josh says. “It’s still unenforceable, but at least it gives you something to try to direct the payment to you as the contractor.” Sometimes, you’ll get lucky, and insurance carriers will choose to honor the request, saving you the hassle of tracking down the policyholder for payment.

Using the Liens Process When Direction to Pay Fails to Secure Payment

Contractors in Florida and Texas who are struggling to secure payment even after trying to use a Direction to Pay agreement can use the liens process to ensure payment. To secure your right to the liens process, give pre-lien notice to customers at the start of every job. Communicate clearly with your customers about what pre-lien notices and liens are. For advice on how to best explain pre-liens to your customers, read our recent blog post.

For More Legal Advice

Laws surrounding restoration work can be complicated. If you’re a contractor who wants to learn more about how Direction to Pay or Assignment of Benefits can be useful for your business, turn to the restoration industry experts at One Claim Solutions. To get monthly insights on all things restoration, sign up for our newsletter – Claims Corner.

Connor Trahan

Account Executive

Hi there! I’m Connor, the Account Executive for One Claim. My goal is to guide our contractors through the sales process, ensuring you’re equipped with all the information you need to make your decision and hit the ground running once aboard. We view ourselves as an extension of your business and I strive to make the process an enlightening and consultative one.
My career has primarily been focused in software sales over a few different industries but the last few years were spent helping general contractors solve similar problems to what we’re doing here at OCS! Outside of work, I love spending time with my family, cooking and boating during the summer months.

Nicole Liesenfelt

Director, Human Resources

Hello! I’m Nicole, and I’m here to champion for our employees, recruit for new talent, and impact culture at One Claim Solution. I find satisfaction in supporting a memorable employee experience and bring innovation, problem solving, and strategic view to the process. Nothing is more important than our people, and a healthy culture is my top priority! I have had the pleasure of building my career in various sectors, specializing in small to medium size firms focused on high-growth. My experience is centered around driving and implementing change, leading high-performing teams, and driving process improvements. I am excited to make an impact at One Claim. Outside of work, my family and I enjoy getting outdoors as much as possible to explore beautiful Colorado!

Elizabeth McGlone

Demand Generation Manager

Great to meet you! I’m Elizabeth, and I’m the one behind all the emails and advertisements you’ve been seeing. As the Demand Generation Manager at One Claim Solution, my mission is to connect with contractors like you who need our services. I’m passionate about having an impact on others and I bring a wealth of experience in demand generation and marketing strategy to create moments of delight, curiosity, and education for you.

Prior to One Claim Solution, I had the privilege of building marketing departments from the ground up at companies in a variety of industries, including IT consulting, first protection, and healthcare. Personally, I love being outdoors, playing Dungeons and Dragons and board games, singing, and traveling.

Alisha Yartzoff

Director of Contractor Success

Welcome! I’m Alisha, and I’m here to champion your success as the Director of Contractor Success at One Claim. With a passion for helping contractors thrive, I bring a wealth of experience in onboarding, customer service, and account management to ensure your journey with us is nothing short of exceptional.

Prior to joining One Claim, I had the privilege of scaling SMB and Enterprise Customer Success teams at fast-growing SaaS startups. With over six years of experience at companies like Mavenlink, Teamwork, and ServiceTitan, I honed my expertise in building high-performing teams and fostering proactive, consultative relationships. This background has equipped me with a deep understanding of the challenges faced by businesses like yours, and I’m dedicated to helping you overcome them.

Eric Terry


Hi there, my name is Eric! I am the Chief Technology Officer here at OCS, spearheading our technical strategy. I have a background in computer science, graduating cum laude from BYU-Idaho with a Bachelor’s degree in Computer Information Technology.

Before coming to One Claim, I served as the Director of Engineering at Slingshot Technology, Inc., a company later acquired by WorkWave in 2021. My professional journey has spanned both emerging startups and established corporations, with a steadfast focus on cultivating high-trust, low bureaucracy teams and innovating technology using agile methodologies.

In my free time, you can find me flying drones, enjoying the outdoors, and spending time with my family.

Cam Smith


Hello, my name is Cam, I’m the COO of One Claim Solution! I come from a management consulting background (Bain & Company) and hold an MBA from the University of Michigan. I have worked at a wide variety of organizations, from Fortune 500 to small-cap, in an equally wide variety of industries. I have over 15 years of experience in operations and strategic growth, and I have spent much of my career focused on developing high-performing tech-enabled service organizations through early stage and high growth phases.

Outside of work, my wife Brittny and I have four kids, ages 13 to 6. As residents of Mesa, Arizona, we love to ski and explore the national parks of the southwest!

Dan Doud


Hello, my name is Dan, and I am the CEO of One Claim Solution. I am super excited by everything we are doing at OCS to be the market leading insurance billing specialist that advocates on behalf of our restoration contractors. 

My professional experiences are predominantly corporate in nature. My career started at General Electric in finance and accounting. Immediately prior to joining OCS, I spent time as an investor at Bondcliff Partners and management consultant with Bain & Company. I also hold an MBA from the Kellogg School of Management at Northwestern University and got my BS in finance and accounting from Northeastern University.

Outside of the office, I enjoy spending time with my wife, two young children, and our family dog, Whiskey. We live in Charleston, SC and take advantage of the beautiful weather by spending as much time as possible outside at the beach or adventuring around town

Josh Ehmke

Co-Founder and General Counsel

Hi, I’m Josh! In 2016, I co-founded One Claim Solution with my partner Jeremy Traasdahl, and I serve as General Counsel of One Claim Solution. Working in the restoration industry, Jeremy and I saw contractors struggling to get paid quickly and fairly and we knew there was a need for change. We founded One Claim Solution to be this change and it’s been my privilege to see our company grow and to advocate for our clients as general counsel.

Outside of my passion for helping the restoration industry, I enjoy spending time outdoors, fly-fishing, hunting, skiing, and coaching my kids’ baseball teams. I’ve been married to my amazing wife for 20 years and we have a beautiful family of 5 children.

Jeremy Traasdahl


Hey, I’m Jeremy! In 2016, I co-founded One Claim Solution with my partner Josh Ehmke. Working in the restoration industry, Josh and I saw contractors struggling to get paid quickly and fairly and we knew there was a need for change. We founded One Claim Solution to be this change and it’s been my privilege to lead our amazing team.

Prior to One Claim Solution, I started my career as an inside sales rep for Avnet, then moved to Pepsico as a district sales manager. Outside of work, I love spending time with my wife and four children, two boys and two girls!